Insurance lobbyists were briefed by mandarins over legal reform

Insurers were given extensive access to civil servants drafting the flagship legal aid bill that would benefit private industry to the tune of hundreds of millions of pounds, new documents reveal. The information helped the industry choreograph an appearance on Radio 4′s Today programme.

Official papers show Robert Wright, the head of civil litigation funding and costs at the Ministry of Justice and the official in charge of the controversial reforms, and his team gave the Association of British Insurers, the industry lobbying body, regular information on their plans.

The documents, obtained under freedom of information, reveal:

• Policy officials were pressing Kenneth Clarke, the justice secretary, to attend insurance industry events with emails telling the ABI that they were “working on” getting ministers to attend events before the Tory party conference last year.

• In May 2011, the government was in talks with the insurance industry over controversial plans to force defendants to pay their costs even if they win a case – a change known as “qualified one-way cost shifting”. The Civil Justice Council, the body tasked with investigating these proposals, was only informed by ministers in July.

• On 8 September 2011, Wright sent the ABI a press release outlining the proposed ban on referral fees – payments for finding victims of road accidents who could sue for compensation, which the industry had long advocated – the day before it became public.

Twenty minutes later, the ABI returned the favour, sending the MoJ its press release, adding it had briefed the BBC’s Today programme and they would use the information “as a basis” for interviewing the minister.

The 118 pages of official papers, record discussions between insurers, their lawyers and government officials working under Jonathan Djanogly, the justice minister. Djanogly gave up regulating parts of the industry after a Cabinet Office investigation into his personal insurance holdings in October.

The legal aid bill is being debated in the Lords until Monday. Financial firms with insurance interests have given the Tories £5.4m in the last decade, £4.9m of that since David Cameron became leader in December 2005.

The prime minister has invited the chief executives from the insurance industry into Downing Street next month to discuss how to deal with the burgeoning costs of civil ligitation.

Lord McNally, the Lib Dem peer piloting the bill through the upper house, had insisted ministers “will not pander to or give special access to ‘vested interests’ such as the Law Society and the Bar Council”.

Desmond Hudson, the Law Society’s chief executive, said: “This looks like being legislation for the insurance industry, by the insurance industry.

“It is an unusual and unsatisfactory notion of democracy when insurers can write the laws of the land. The Law Society has campaigned and lobbied for changes in the interests of access to justice … the government must be even-handed with all interested parties of the bill.”

But a spokesperson for the ABI said: “We have not said anything in private that we have not said in public and we have nothing to hide. We make no apology for providing evidence to policymakers to tackle the compensation culture and help reduce motor insurance premiums. The ABI, unlike the claimant lawyer lobby, has provided the evidence and analysis to support our public policy positions rather than rely on rhetoric and anecdote.”

Labour claimed policy was being made to favour “Tory paymasters”. Andy Slaughter, Labour’s justice spokesman, said: “The justice system is meant to serve victims of harm, not the insurers of those that caused that harm. The Tory party seems obsessed with favouring financial services companies and their corporate donors over ordinary people.

“As with brutal cuts to legal aid, this shows the true colours of Ken Clarke’s Ministry of Justice, reconfiguring the rules of the game to favour large public and private corporations over citizens.”

An MoJ spokesman denied that the insurance industry had been given privileged access to the ministry. “Ongoing dialogue between government and stakeholders is an important part of policymaking. It is normal business to listen to a range of views.”